Copyright versus wrong: who's really to blame for illegal music downloads?

In this age of torrents and peer-to-peer (P2P) file sharing, it is the entertainment industry that has taken the biggest hit.

Users want data - some are happy to pay for it - as we just saw with the massive release of Adele's new album 25. But most are happy enough to illegally download music albums, films, TV series and books from a vast number of online platforms.

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All of which results in massive loss of revenue for various industries. The music industry - rightfully - complains each year about how it loses billions of dollars from the illegal downloading of songs, depriving them of the revenue to pay everyone on their payroll.

It also creates huge production risk.

Very soon, we may soon see a very different world, one where the only works worth producing would be ones that cost very little to make. Or where the costs could somehow be recovered through performance, or the cult of personality. (It would mean Chetan Bhagat would have to find a new job).

The challenge of copyright online has reached a stage where courts in various countries are now involved. The seemingly simple - but in reality fairly complex - question: who exactly is responsible for copyright infringement through illegal downloads?

Germany's latest step

Just a few days ago, Germany's Supreme Court opened the door for ISP (internet service provider) blockades of copyright infringement.

It ruled that ISPs can be required to block websites if, and only if, copyright holders have exhausted all their options to identify the operators or hosting providers of pirate sites. Only then would such a blockade be warranted, it decided.

With this ruling, the court dismissed two cases; one brought by the state-authorised music rights society GEMA against Deutsche Telekom, which is Germany's largest telecom company; the second by music companies Universal Music, Sony and Warner Music Group against Telefonica's O2 Deutschland.

Germany just ruled that your internet service provider may need to block sites hosting illegally downloaded content

This tactic of "domain blocking" has steadily become the go-to option for the entertainment industry in Europe.

Except Germany.

So far in most countries, civil claims against ISPs have only been successful when it comes to people who are acting "on a commercial scale".

Highlighting the complexity of the problem is this: on the same day, a court in Sweden ruled that Sweden's ISPs cannot be forced to block filesharing site PirateBay, nor be held responsible for copyright infringements by users.

The case was filed when Universal Music, Sony Music, Warner Music, Nordisk Film and the Swedish Film Industry teamed up to slap a lawsuit on Swedish ISP Bredbandsbolaget - demanding they block the site.

It's a verdict that took even the creators of PirateBay by surprise.

The website, blocked by dozens of ISPs around Europe and very accustomed to suits of this nature, has always continued to operate despite several takedowns and resurrections. In standing up for the ISPs, the court has had no choice but to stand up for PirateBay itself.

The internet in Germany, and why it matters

Let's just quickly get acquainted with the numbers. Germany, Europe's most populous country, has a population of 80 million, of which 84% are online.

What's more, the internet there is ridiculously free: no social media sites are blocked, nor are sites which host political or social opinion. There are next to no internet censorship cases or bloggers in jail.

Even when it comes to illegal downloading, Germany fares better than the rest. The ratio between illegal and legal downloading in Germany is 1:8, in most other countries it's 1:20.

Even so, illegal use eats up bandwidth of ISPs up to 70%.

When legal problems arise online, who should bear the cost of liability?

Most users are obviously aware that P2P sharing is illegal.

Why then do copyright holders sue the ISP rather than the person responsible for the infringement?

Two main reasons.

First, it's hard to sue someone if you can't find him/her. Most ISPs are corporate entities with fixed places of business; their users who post infringing materials may be mobile or difficult to track down.

Second, the infringers are likely to be "judgment-proof" - meaning that they lack the financial resources to pay a substantial liability judgment.

Since ISPs obviously have deeper pockets than an individual - it's the far more lucrative option.

But is it fair? At the end of the day, the only role of an ISP is to provide customers with internet access while facilitating the free-flow of information.

How might an ISP react to the threat of copyright liability?

One response might be to aggressively police its servers for copyright infringements.

But that raises two problems: the issue of privacy and the fact that they'd have to review vast mountains of data - which would be costly and difficult.

Safeguards currently in place

In a few countries, ISPs have their own methods of informing and educating users by using an ISP customer protection programme.

It's a controversial method because it allows the consumer to be identified, making his or her IP address government knowledge, but has proved to be effective time and time again: 70% of users stop sharing files illegally after being warned for the first time. Upon a second warning, 90% stop.

But Germany, where freedom of internet is taken seriously, has the strictest data protection laws in Europe - even the storage of IP addresses and the matching of an ISP with individual customers is illegal.

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This makes it next to impossible for German ISPs - or gives them a great excuse - for not putting such graduated response models in place.

Which is why the real argument in the copyright wars is actually about the need to balance the protection of property with that of privacy and data protection - both of which are truly fundamental rights.

Even so, it is possible to extract the name and address of a subscriber of an internet connection via which illegal filesharing has been committed under German law. But before an ISP can provide these details, it needs the rights holder to provide a court order allowing for disclosure. This is due to the sensitivity and the constitutional protection of personal data under German law.

The position is similar in the UK.

But the court imposes limitations here. Such an order can only occur after the extent of copyright infringement has been determined.

Options the world is debating

Many methods are being debated to resolve this issue.

The music industry has proposed a restrictive copyright law that would tighten third party obligations (filtering/blocking obligations for ISPs).

A minority opinion even goes far enough to ask for lump sum remuneration (a "culture flat rate") according to which a certain fee will be charged monthly by the ISP for each internet connection above data usage.

Other suggestions include the introduction of on-screen warning signals (such as a red flag) when internet users go to download illegal content. The French, under the HADOPI law, uses a "three strikes and you are out system - a system that has been rejected by the US in favour of a "six-strike" programme.

Implemented in February 2013, the Copyright Alert System in the US is used to "alert, educate and punish" subscribers of five major ISPs - AT&T, Cablevision, Time Warner Cable, Verizon and Comcast.

There's always the danger of a telecom company entering into a deal with the government where ISPs receive immunity from wiretapping laws - meaning the ISPs wouldn't be prosecuted for the surveillance of customers' network traffic and, subsequently, handing that information over to the government.

Which means that in the fight between the three parties - rights holders, ISPs and users - it's the user who's always left the most exposed.

Canada uses the "notice and notice" system that ensures the subscriber's personal information is never revealed. It simply forwards infringement notices to users and does not even force the ISP to make sure that the infringing material is removed.

The lack of a take-down provision means that the responsibility lands on copyright owners to go to court to enforce the removal of the infringed material.

How much money are businesses losing thanks to piracy?

In all, 22% of all global internet bandwidth used is for piracy. Of that, 99.8% of data transferred using P2P networks in copyrighted. It's been estimated that as much as $200 and $250 billion per year is lost due to piracy.

And that 95% of all music downloaded online is illegal.

It's hardly surprising the entertainment industry is frothing at the mouth. Their salaries and earnings - and eventually, their very existence, are at stake.

But sometimes that noise can lead to some very weird laws.

Sample this: on 27 November, the UK's 2014 private copying exception, which allowed people to make personal copies of their own music, including format-shifted versions, was definitively withdrawn.

As a result, it is once more illegal to make personal backups of music, videos or e-books, rip CDs and DVDs to standalone digital files, or upload your music to the cloud in the UK.

Because by this definition, 'sharing' with yourself is also a crime.

How YouTube fights copyright infringement

It's the single largest platform for content upload in the world, so what YouTube does matters.

Even though YouTube users are instructed to only upload content that belongs to them and that they have the right to use, copyrighted content is still uploaded thousands of times a day.

Under the Digital Millennium Copyright Act (DMCA) in the US, YouTube is in no way responsible for copyright violations by its users, provided the company removes that content when notified by the rights holders.

YouTube started building a system called ContentID in 2007. It allows rights holders to identify content that is comprised partially or entirely of their content.

Rights holders submit copies of content or ID files that are then run against user uploads. If videos are matched, the rights holder can choose to block, track and even monetise the copied content.

But there's a flaw.

According to Patrick McKay, a web expert: "Anyone who manages to gain admission to the Content ID program can upload any content they want into the system, which it then flags as belonging to them. They can then block or monetise any video they want, regardless of whether they really own any copyright interest in it."

In 2012, Google even rolled out a change to its search ranking algorithm in an effort to reduce copyright issues. It began to demote websites that receive a high number of valid copyright removal notices.

The system has its own problem - its not very opaque and can allow for a lot of false positives.

Who is the real injured party?

Remember an old ad campaign when piracy first came into play? "Stealing a song is as bad as stealing a car."

Not quite, but they were trying to sell the black and white idea that stealing is stealing.

But when you download something illegally, is the money really taken from an artiste's pocket?

Industry and content producers would like you to believe so. The main argument against piracy is that it undermines and steals from the people who create the content being stolen.

But this is not a notion that has been fully explored.

According to a report by the Government Accountability Office in 2010, these numbers "cannot be substantiated or traced back to an underlying data source or methodology."

Basically, there's no real data to back any of this.

Which is exactly why this debate is like a never-ending circle in hell. It's impossible to really blame anyone, figure out losses and profits, or decide exactly where blame should lie.

And in these murky waters, the murkiest position of them all is that of the ISP.

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